YouTube challenger: Facebook to pay videomakers on ‘suggested videos’ feed

Facebook announced a ‘suggested videos’ feed on Wednesday after launching a ‘recommended videos’ feature last month.

Facebook’s 1.4 billion users may not necessarily turn to the site for its videos, but the social network is looking to change that.

After launching a ‘recommended videos’ feature last month, similar to that of YouTube, the site announced a "Suggested Videos" feed on Wednesday, Recode reported. Once a user watches a video in their news feed, Facebook will redirect that person to a personalized video feed where they can find other clips they may be interested in.

The feature will also include ads between curated videos from major media companies, similar to television commercials, according to The Wall Street Journal. Its advertising revenue model could make the Facebook feed a highly coveted platform for video creators and advertisers alike.

When users watch videos with featured ads, 55 percent of the revenue will go to the video creator, while Facebook will keep the remaining 45 percent. Videos that keep people watching for longer will earn a greater share of the revenue from these ads, the BBC reported.

The move signals that Facebook is dedicated to pushing more video content on its users. “There are use cases when someone wants to go into a video consumption experience,” Dan Rose, Facebook vice president of partnerships, told The Wall Street Journal. “Scrolling through your news feed is not the most efficient way of doing that.”

Experts say the new feed poses a threat to video giant YouTube. "Facebook is aggressively moving into the video space," Eleni Marouli, advertising analyst at IHS consultancy, told the BBC. "In December 2014, Facebook surpassed YouTube in views for the first time, and we predict YouTube will lose share from next year onwards."

Facebook’s ad revenue is akin to that of YouTube, but it offers less financial incentive for video creators. The site will divide creators' share of ad revenue among all the videos that appear next to an ad, depending on how long users watch each video, The Wall Street Journal reported. “So if they spent one minute on a few NBA videos and two minutes in a couple videos from Funny or Die, we would take that 55% of the revenue we’re sharing, we would give a third of it to the NBA and two-thirds of it to Funny or Die,” Mr. Rose said.

Yet Robert Kyncl, head of content and business operations at YouTube, says he’s isn’t worried about Facebook’s latest venture. In an interview with the Financial Times, he said the online video market was growing so fast that “it will be a decade before we bump into each other.”

“Before it was just us and TV,” he said.

Facebook’s plan to boost its video content doesn’t come as a surprise. The company bought video tech startup QuickFire Networks in January, according to Silicon Angle. The startup designs technology that can process and transcode video efficiently to develop video frameworks that can quickly load high quality media.

The ‘Suggested Videos’ feed will hit iOS in coming weeks, before it reaches the web and Android smartphones in fall.